Accounting And Finance Division Ms Finance Finance Essay - Free Essay Example

Sample details Pages: 9 Words: 2586 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? 2. Introduction and background: In todays modern business world, every company wants to get prosperous with their current market condition, where it is facing competition against its rivals within local market and international market. The question always has been arise whether the company performance is related to the pay or incentives of executives, so in order to find if there is any relationship between them, hence I have opted to choose the topic. Don’t waste time! Our writers will create an original "Accounting And Finance Division Ms Finance Finance Essay" essay for you Create order Top management drives the company, plays a vital role in leading the company for growth and development. The executive purpose is making profit and taking corrective decisions for the firm. Gray, SR., Benson and PG states that a small part of non-profit organisation ie executives but amazingly set the importance of non-profit organizations and in general factor community observation regarding their levels of pay of executive. MC Jensen, WH Meckling narrates that generally shareholder shows very less interest on the size of the firm but it prefers measuring efforts of executive in economic performance. It also states that shareholders basic objective is to maximize the return on investments. One of the main point arises is high salary for top executive are worth paid for their performance. For example, in one of the articles publish in Zimbio (https://www.zimbio.com/CEO+Richard+Fuld/articles/182/Lehman+Brothers+CEO+Defends+Nearly+500+Million) in term of 8 years with Lehman Brothers, R ichard Fuld made $484 million in form of bonuses, salary and stock options as he eventually drove his company out of existence. McKnight, PJ in his articles highlighted that salaries are always pre-determined during the beginning of the financial year and bonuses are decided at the end of the financial year with taking into consideration of companies economic performance and, then there should not be any relationship between compensation and performance of the individuals. The main objectives of this study are to focus on key elements of executive compensation is related to company performance. Conyon, MJ (2007) reveal in UK there are two or more executive compensation consultants such as Monk, UK PricewaterhouseCoopers and also Deloitte is main consultants. In an organisation, of the total work force only few percentage of the total workforce works in top management and they enjoys good sum of compensation. During the boom period of financial market, companies tend to pay enormo us fees to their workers which includes top executive of the company. This rise in bonuses was severely lop-sided on the way to cash rather than stock. There has been many discussions on performance of an individual should be relate to their compensation and benefits. Performance based incentives brings out more of growth opportunities within the company, it also involves more of risk taking and promotes long term orientation. 3. Theory and prior research: In the past few decades there have been many literature review by researcher on the rise in executive compensation, hence this rise in incentive, has shown interest researcher to work on this topic. Bebchuk and Grinstein (2005) narrates that there has been significant rise in executive compensation and growth are mostly based on equity which does not due to reducing cash based compensation These are established on two factors arm`s length model of bargaining and managerial power model influencing the pay and incentives of executive compensation. Conyon Sadler (2001) described that the compensation of the company has been increased drastically in the recent decades. It also held on tournament theory which predicts that the CEO may put on effort to promote a well-paid place job. Also observed relationship between performance of the company and incentives received to executive, by measuring the return on company with management financial incentives and firm performance. According Tro janowski Renneboog (2002) evaluates that if the ownership of the company is given to the executive then the company will show positive performance. It also states that cumulative use of agency theory results to company performance in the market (stock performance), increase in compensation and stock dependent. It also analyse two managerial of labour market executive disciplinary costs and executive compensation schemes. Voulgaris, Stathopoulos Walker (2010) showed a new evidence of executive pay relates with executive compensation. It states that the managerial power approach has aggregate outcome on the compensation which influence the equity based compensation pay level to rise. It also showed executive compensation is more relates to power of top level executive than that of economic causes. Pay and compensation structure are related to the managerial power approach. Ozkan (2007) with the data set of 390 UK non-financial firm periods from 1999 2005 shows constructive and s ignificant link between level of executive compensation and performance of firms. The author also showed the level of compensation for large UK companies includes both cash and equity based components. This paper used GMM system method which controls the presence of unobserved firm-specific effects and for the growth within the explanatory variables. The CEO cash compensation does not get impacted with the proportion of non-executive directors of the firm, but ownership can provide incentives to non-executives directors. Espenlaub, Stathopoulos, Walker (2007) by collating data from 3307 executives observed that there is a relationship between managerial incentives and firm risk reveals a nonlinear relationship with the size of the firm to medium size quoted companies. The article also explains that small size company shows there is a negative relationship between pay by performance and risk consistent with standard agency model but for large company relationship becomes unstabl e with different models. Hence it concludes that neither of any models can full explain the relationship of performance by pay and the risk. Goh Gupta (2010) narrates that there is a wide range of equity based pay structure in firm and an extensive of compensation consultant of high level of pay. This paper use the samples of 350 FTSE firms from 2002 2008 it states that the CEO and top executive of the firm enjoy high salary incremental in the year and less uncertain payment package. And greater bonus in terms of cash and less in term of equity based compensation in the form of stock. It also finds no evidence that the increase in number of consultant results to increase in compensation than that of non-increasing consultant for the firm. Therefore it concludes that in some companys consultant are successful in constructive compensation of pay of top executive of the firm. Camara (2008) states that ever since 1995 not less than 50% of the FTSE companies have decided to raise an d grant bonuses to senior executives, as the payoffs which are dependent of the firm stock return relative to a given period of time. Hence the results suggests that the firm in UK practice when relative performance incentives standby with absolute performance incentives tends to decline in cost of cost of incentives package, they also take undertake high risky capital investment projects and to increase the wealth of shareholders they reduce the incentives of the executives. Conyon, Peck Sadler (2000) observed 100 UK companies which are listed in stock market and covering more than 500 executives all over from UK at the end of 1990s. It has been observed that there is a convex relationship between executive pay at a managerial level and a break between CEO executive pay and board structural level. It also showed the executive have small role in forming the company performance. Conyon (2007) highlighted three main findings from his studies; CEO compensation are paid very high an d they are greater than firm using consultant compensation, the amount of equity based incentives is higher than the consultant of the firm and found less evidence with the possible within the conflicts of interest which tends to high pay or package to CEO. Murphy (1998) this paper examines the pay structure of executive compensation by equipping potential researcher by summarizing the empirical and theoretical research. Also it has been analyse that higher pay and performance are less in huge firms, the pay level and performance is less in regulating utilities than that of industry firm and the pay performance is high in US than any other countries. Labour economist usually focused on market performance but now they are more interested in pay of executives as inside data of the firm is very messy and unavailable. Hence the study of executive compensation states that there is a comprehensive and perspective significant influencial of top management of the firm in compensation pai d to them also. Conyon Murphy (2000) states that they found a difference in incentives and pay of executives in United States and United Kingdom in 1997, US CEO earns 45% higher cash compensation and total compensation by 190%. The median CEO of US gets 1.48% of any shareholders wealth increase whereas UK gets 0.25%. The main differences between these countries are US feature greater share option award from institutional and there is a culture difference. Conyon (2007) observed that a letter from Warren Buffet in February 07 to the stakeholders of Berkshire Hathaway CEO perks at one company are quickly copied elsewhere. All the other kids have one may seem a thought too juvenile to use as a rationale in the boardroom. But consultants employ precisely this argument, phrased more elegantly of course, when they make recommendations to comp committees Therefore it is not so much academically proven that executive compensation is related to equity compensation to executives. 4. Research objectives: The plans of the research is based on the prior working reports and evidence of article or journal in which researchers tried to explain and reviewing their point of view toward the topic and looking out for evidence obtained by the researcher deriving their best possible outcomes; whether it is directly or indirectly relates to executive compensation. Also in terms of agency theory whether it is applicable in stock price to grow gradually during this period as top management of the firm are agents of stock holder. It will be based on top executive incentives earned when they were in the power to drive the company during the term and check if the benefits received from the firm are up to their marks of their contribution made toward the company. To identify performance of executive in UK market with regards to their pay compensation. To examine the exemption and the factors associates behind the executive compensation It will focus on the relationship between the executive performance pay and size of the firm by two equations The basic motivation for study in this topic is to understand the policies of company regarding their pay and package structure and to understand the structure of compensation paid to executive and to have a close review on their decision making and its outcome. 5. Methods and data: Based on the model applied by McKnight (1996) showed the relationship between the executive performance and incentives pay and size of the firm by two equations The basic hypotheses to determine the executive compensation are used by two hypotheses equation: Determining company performance with the compensation paid to the executives. And the empirical relationship between sizes of the firm with the compensation paid to their executives. It predicts compensation which is dependent variables . (1) ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Compit = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±t +ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²ÃƒÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  (Perf)it-1 Where, ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Compit is percentage change in executive compensation and percentage change in annual bonus and sum of salary. ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  (Perf) = Performance of the company over the period of time i = aggregate salary of executive t = time (year) The percentange change in companys perf ormance ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Perfi = [(ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Perft (ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Perfit 1))/ (ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Perfit 1)] Where the performance of the company can be represented by ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Perfi in year subtracted by performance in the previous year t-1 divided by the performance variable in the year t-1. The following equation shows relationship between size of the firm and executive pay compensation. This equation forecasts compensation which is dependent by and ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Compit will be influenced by size of the firm as independent (2) ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Compit = ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±t +ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²ln(Size)it-1 + eit Where ÃÆ' ¢Ãƒâ€¹Ã¢â‚¬  Ãƒ ¢Ã¢â€š ¬Ã‚  Compit = the salary and bonus over a period of time. i = aggregate salary of executive t = time (year) ln(Size)it-1= Log of the size of the firm ie sales turnover and total asset of the firm The nature of the research will be to desire the goals of the topic chosen and meeting their objectives. The basic objective of research would be collecting data, eliminating irrelevant data which are not useful for the research. The study period for this would range from 1997 to 2007 of 60 medium to large UK companies. Review of applied research theory, interpreting them with wide range of different reports and working on the similar issue. As the research is based on the performance of the company, it becomes very crucial to find the performance relationship of the company with respect to compensation drawn by the executives. For research on executive compensation the data sets use would be annual reports, secondary data and if required from the Data Stream. If in case any additional information or data set is required for the topic then Data Stream or from companies annual report websites will play an important role in analysing the data contents and p resenting. The annual statement reports includes following detail remuneration policy statement, details of compensation committee members and advisors, performance graph, details of the directors if it is internal or external, the details of the director remuneration and the term spent etc. 6. Research ethics: Vrakatseli (2006) ethical considerations were taken into account; therefore the name of the project as well as the names of the firm that participated in it was reformed in this study to ensure confidentiality. The study for topic does not involve any direct contact with human nature. It is an explanatory theory based on the performance of the executive pay and compensation. This study of executive compensation involves the past study by practitioners and data from the Datastream. It is a case study where I need to find the correct, needful and relevant data, as per regulation act, it is a compliance issue to deal with human behaviour. According to Willig (2001), investigators should always respect the thoughts and protect their applicants from any harm or loss or damage, and they should aim to preserve their emotional well-being and self-respect their privacy at all times. 7. Time scale and resources: If deadline for a dissertation is given, planning and fixing of a project before deadline makes one feel good for project. Flexibly or alternate planning of the projects should be there during stumble. The proposed dissertation timeline can be slightly different but most of them follow a general process of flowchart. Dissertation plans and time consuming for work (each section) to get completed on time so that there is no possible delay for it. Time schedule grid motivates encourage that the particular task needs to be performed. Some of the examples of planning and managing the work are brainstorming about the topic, random flow of fishbone diagrams, analysing critical path with help of flow chart and a very common use to planning the project is Gantt chart. According to Taylor, S.J. Bogdan, R. (1998) showed different methods of collecting data and techniques which needs to be applied, when applying to actual study and practice. A research design must be planned in order to get w ork completed on time. It is mapping out the method for the best answering the research questions. Weeks 1 2 3 4 5 6 7 8 9 10 11 12 Steps             Creating and developing research questions             Planning, collecting and managing general information to start             Company annual reports collecting data and other information             Reading and evaluating information             Taking notes of main findings             Organizing information             Planning and developing the dissertation             Reviewing and revising my 1st draft             Editing, revising and designing draft             Adding additional information and Finalizing the report             Completion and submition of report             Gantt chart

How Healthcare Is Moving Swiftly Into Uncharted Territory

Healthcare is moving swiftly into uncharted territory. New regulations, changes in Medicare and Medicaid, and even reimbursement issues are all on the forefront of the twenty-first century healthcare. Heated battles are ongoing in the political arena, however it is the American patient that will feel its effects, changes, and unfortunately undergo its transition. With the ever increasing needs related to patient care, such as living longer, more complex diseases, and rapid advancement in technology, a shift in education is a must. There is a profound difference it the handling of the healthcare system. Different viewpoints has caused a poor delivery system in patient care. As nurse leaders, leading the way will be instrumental in†¦show more content†¦The patient protection and affordable care act, which attempts to reform healthcare will serve as a likely opportunity for advanced practice nurses to contribute expressively to the delivery of healthcare. While some phy sicians are battling to restrict advance practice nurses, reformers on the other hand are working just as diligently to support the advance practice role and movement. Rebecca Patton, president of the American Nursing Association, states â€Å"In some situations it can be a turf battle† (Pickert, 2009). The use of word â€Å"doctor† has caused quite a stir amongst primary care physicians. Most feel it is confusing to say the least, but advance practice nurses are fully aware of the level of education one has acquired. Educating patients to know the difference does not oppose a conflict. A New Health Care System for the 21st Century According to the Institute of Medicine, we are faced with such rapid changes, the nation’s health care delivery system has fallen short in its ability to translate knowledge into practice and to apply new technology safely and appropriately (IOM, 2001). As an advanced practice nurse, leading and teaching shall be vital to the delivery system outcomes. The Institute of Medicine has identified six areas of needed improvement such as safe care, effective care, patient-centered care, timely services, efficient care, and

Business Communications and Contract

Question: Define the term for Business Communications and Contract. Answer: 1. Issue: The issue here is whether an enforceable contract exists between Julie and Samantha since the communication of the acceptance of the contract was not as per desired format. Rule: An enforceable contract is one which is legally bound by law. If the contract is not performed as per the decided terms then the same becomes subject to legal remedy i.e. the plaintiff is subject to remedy for the loss he suffers due to a breach by the defendant in performance of the contract. Some of the essential elements for defining a contract as enforceable are as under : Offer: An offer is defined as an expression wherein one person shows his or her willingness to enter into a contract with the other person for performance of an act. An offer can be made either by messaging, or orally or in any such manner which shows an offer is being made. Thus all these elements confirm an offer. Acceptance: When an offer is accepted by the offeree, it is termed as acceptance. It is the final consent which the offeree gives after due negotiations between the two. Acceptance should be made by the offeree in the manner desired by the offeror[1]. However if the same is not done in the desired manner and the offeror fails to communicate to the offeree to accept the offer in the manner desired then it is construed that the offer has been accepted by the offeror even though not accepted in the manner prescribed by the offeree. Competent Parties: The parties to a contract should be competent enough to enter into a valid enforceable contract. Either of the parties should not be insane, minor, drunk or incapable to contract[2]. Lawful Subject Matter: The terms of the contract should not be such that violates the public policies or the law of the country where the performance of the contract is to be done. Mutual Obligation: The parties to the contract should be obligated to perform their individual. The terms should be agreed mutually and there should not be any kind of force. Consideration: The most important thing for a valid contract is consideration which may be either monetary or non-monetary in nature[3]. Application: Therefore in the said case an enforceable contract exists between Samantha and Julie as there is a clear cut offer and acceptance made in the said contract. Acceptance though not made in the form desired by Julie yet the same is enforceable as the mode of acceptance made by Samantha though not as desired by Julie yet Julie has not made any effort to ask her to communicate acceptance in the manner desired by her. Further it also contains all the other elements of a valid contract. Conclusion: Therefore in the said case a clear cut legally enforceable contract exists between the two parties. The elements of a contract to make it legally acceptable is duly present. 2.Issue: Whether Samantha is entitled to pay $100 to Julies mother? Rule: In any contract, the terms of the agreement can be altered only on the consent of the contracting parties. Until and unless the same is done, the contract is to be performed as decided upon without any deviation from either party. Application: Samantha is not entitled to pay $100 to Julies mother until and unless intimation is given by Julie to Samantha for the same. If Samantha does so without Julies consent then it would be understood that Samantha has not made good for the amount that she had asked for. She can pay to Julies mother but before doing so Samantha should intimate Julie and only if she agrees to the same, the payment of $100 can be made to her mother. If not then it leads to breach of contract on the part of Samantha[4] . Conclusion: In the said case thus it is clear that any act without the mutual consent of but the parties to a contract will be construed as a breach of contract and therefore Samantha is not entitled to do the same without obtaining consent from Julie. 3. Issue: Is promissory estoppel relevant to Samanthas dispute with Dave from outrageous costumes? Rule: A promissory estoppel is a principle which states that a promise to perform an act is enforceable by law even though there does not exist any consideration formally communicated, if the promisor has promised to the promise and depending upon the promise performs the act. Thus as per the doctrine of promissory estoppel the party who has performed his promise has the right to recover the consideration for the same even if a legal contract does not exist. The applicability of this doctrine depends upon the loss that the promise suffers due to non fulfilments of the promise. As per the said doctrine the party who has suffered damages has full rights to recover the same if the damage was caused due to existence of a promise made by the promisor basis which the promise fulfilled the promise. Thus some basic elements should be present for the successful application of the same: The promise made should be in such a reliable manner that entitled the promise to act accordingly. There was a reliance made by the promise upon the promise There was a significant loss that the performer of the promise suffered. The promise can gain respite only once the promise is fulfilled by the promisor[5]. Application: In the said case promissory estoppels is relevant to Samanthas dispute with Dave from outrageous costumes. Thus on analysing the same it is understood that Samantha had promised for the performance of the contract and there was an enforceable contract between the two by doctrine of promissory estoppel. When Dave had communicated Samantha about the cost and the fact that the materials she is demanding is a little expensive, Samantha gave her written consent over an email writing her to proceed with the work and that the measurements would be provided in a weeks time. When the materials were received, Dave informed her and started to work upon the same[6]. The said message was ignored by Samantha and remembers just two days before the show that she had to inform Dave about the cancellation of the order. However meanwhile Dave had already made the dresses. Thus Dave is entitled to be made good for the cost by Samantha as since she was promised by Samantha for the act basis which she pur chased the materials and after due information she performed the act thinking that since the promise was made, Samantha would take delivery of the same. But her denial at the last moment left Dave in a loss position which she could easily recover basis the promissory estoppel principle. It is very similar to the case of Devecmon v. Shaw. Conclusion: Therefore Dave can easily claim for the loss that she has suffered due to the same from Samantha. The promisor not performing his promise to pay the promise puts her in a position of breach of contract[7]. 4. Issue: Is Will entitled to two free tickets for helping setup of the school play? Rule: It is a contract implied in fact and not in law. A contract that is implied in fact is not expressly defined but comes into existence due to availability of certain facts and figures which clearly points towards an intent to enter into a contract on mutual terms. The situation is such that basis which depending upon the normal course the parties conduct makes it evident that their exists a legal intention for the performance of the contract. Implied contracts do not any kind of assent from the parties to a contract but the assent exists automatically by virtue of the performance by the promise and acceptance of the performance by the promisor[8]. Application: In the said circumstance Samantha had sent an email to all parents that the first ten volunteers would get two free tickets of the show and on receiving this email Will, the elder brother of a student who is performing volunteers for the same so that he gets the free tickets. Even though the email clearly mentioned about the parents as volunteers, the same is still applicable for Will as well. Even though he is not a parent of the student but has shown his willingness to assist and Samantha has accepted is help also the said contract falls under the purview of an implied contract[9]. Therefore in the said scenario also an implied in fact contract exists between Will and Samantha. Although Will is not the parent of the student but his elder brother and the offer was proposed for the parents only, but Will proposed to assist basis that email only. Had Samantha not given such an email, then Will would have never come up to volunteer. Conclusion: Thus it is implied and understood that if Will has agreed to help then the sole reason is the consideration offered by Samantha. The same is also communicated well that Will has volunteered due to the email received. Had Samantha not agreed to the services of Will then it would have been clear that she only wants the help of parents and nobody else but that was not the issue. She ultimately was looking for assistance. Therefore Will is rightfully entitled to the two free tickets for helping for the set up for the school play[10].